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US dollar index hits 4-week lows near 96.25 on potential US yield-curve inversion

  • US growth concerns, US yield-curve inversion risks weigh heavily on the US dollar.
  • Technical setup suggests further downside still likely, as markets reposition heading into the New Year.

The US dollar index, the greenback when measured against a basket of six major currencies, came under heavy selling pressure in Europe and reached the lowest levels in four weeks near 96.20 region after the Fed’s less dovish forward guidance aggravated the risks of the US economic slowdown.

This was also illustrated by the flattening US yield-curve, which is nearing the 11-year low reached earlier this month. Markets still believe that the Fed will slow down its pace of policy tightening next year, despite the Fed’s ‘dot plots’ still signaling two rate hikes for the next year.

Therefore, the US yield-curve inversion still remains a serious risk that would signal a US economic recession and weigh negatively on the greenback across its main competitors. Moreover, markets resort to repositioning and closing out the USD longs heading into the New Year, eventually adding to the weight on the buck.

US dollar index Technical Levels

Dollar Index Spot

Overview:
    Today Last Price: 96.27
    Today Daily change: -76 pips
    Today Daily change %: -0.783%
    Today Daily Open: 97.03
Trends:
    Previous Daily SMA20: 97.03
    Previous Daily SMA50: 96.61
    Previous Daily SMA100: 95.92
    Previous Daily SMA200: 94.36
Levels:
    Previous Daily High: 97.1
    Previous Daily Low: 96.55
    Previous Weekly High: 97.71
    Previous Weekly Low: 96.36
    Previous Monthly High: 97.7
    Previous Monthly Low: 95.68
    Previous Daily Fibonacci 38.2%: 96.76
    Previous Daily Fibonacci 61.8%: 96.89
    Previous Daily Pivot Point S1: 96.69
    Previous Daily Pivot Point S2: 96.34
    Previous Daily Pivot Point S3: 96.14
    Previous Daily Pivot Point R1: 97.24
    Previous Daily Pivot Point R2: 97.44
    Previous Daily Pivot Point R3: 97.79

 

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